Reich Like Dishonest Bankrupt, Says Analyst of Debt-pay Plan

The present position of the Reichsbank is reminiscent of a dishonest debtor who, prior to applying for the appointment of a receiver, strips himself of all available assets, transferring them to relatives and confidence men, according to Dr. Max Winkler, head of the American Council of Foreign Bondholders, Inc., in a statement commenting upon the latest agreement reached in Berlin with Germany’s creditors.

“While it is true that the gold reserve of the bank has been dissipated to a purely nominal-figure, in order to impress Germany’s creditors with the sincerity of Dr. Schacht’s plea of poverty, it should be borne in mind that the position of the Reichsbank does not convey an accurate picture of the state of the mark.

“The gold stock of the Gold Discount Bank, owned by the government, is in the final analysis also a part of Germany’s metallic reserve. So is the gold of the various state banks, including those of Bavaria, Baden, Wurttemberg, and Saxony. So is the gold and foreign exchange of the Prussian Seehandlung and the Reichs-Kredit Gesellschaft. So is that of the Dresdner Bank which passed into the hands of the government. In fact, whatever yellow metal or foreign exchange may be owned by any financial or commercial enterprise in the Reich, is the incontestable property of the government.

“By parading the precarious position of the mark on the basis of figures published by the Reichsbank, and by ignoring the position of all other institutions, Dr. Schacht has succeeded in convincing the ‘spokesmen’ for American holders of long-term German bonds that the Reich can no longer meet its engagements.

“Dr. Schacht has told Germany’s creditors the truth, but he has not told them the whole truth.”